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E*Trade Sale May Hinge
On Mortgage Portfolio

By

Dennis K. Berman,

Susanne Craig and

Matthew Karnitschnig

Updated Nov. 26, 2007 12:01 a.m. ET

As E*Trade Financial Corp. moves closer to being sold, prospective suitors for the company are haggling over the value of its deteriorating mortgage portfolio, people familiar with the discussions say.

E*Trade, while best known for its discount brokerage operations, has made a big move into home mortgages, lines of credit and mortgages securities in recent years. As the housing market has declined, the value of mortgage securities has...